tv Charlie Rose PBS April 17, 2015 12:00pm-1:01pm PDT
>> rose: welcome to the program. tonight we begin with the chairman and ceo of ibm, ginni rometty. >> it's analytics that help banks do customer retention, that do fraud. it's healthcare -- you know i think of our history, people back in time, we have participated in some of the most glorious moments in history, whether it might have been the first systems that ever did census or landing on the moon our moon shot will be the impact we have on healthcare. it's already started. we'll do our part to change the face of healthcare. i am absolutely positive about it. >> rose: we continue with the former ceo of general electric jack welch and wife suzy talking about their real book, "the real-life mba: your no-bs guide to winning the game, building a team, and growing your career". >> they love to give raises, they love to give bonuses, they never steal an idea from one
person and show it as their own, they always give credit. it's the spirit. when you see people like that and if you think back over all your life charlie of who you've met and have done well and were consistently doing well they had that spirit. and you think about the skin flint who is holding back, taking ideas they don't go that far. >> ginni rometty, jack welch, suzy welch, when we continue. >> rose: funding for "charlie rose" has been provided by: >> rose: additional funding provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide.
captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: ginni rometty is here. she is chairman and ceo of ibm. fortunefortune magazine named her as the most powerful woman in business for the last three years. for over a century, ibm has been among the globe's most powerful countries, it's in 90% of the banks and 70% of all corporate enterprises. 2014 was altransformationle year for the company. they continued to share businesses such assemy conductors. it's on the cloud, mobile commute computing and artificial intelligence. it announced watson health for analyzing healthcare data. i am pleased to have the ceo of ibm at the table for the first time. welcome. >> thank you, charlie. >> rose: tell me where ibm is
today and where you want to take it. >> i had a great company and you would expect me to say nothing else. it's 104 years old now. when you said we're transforming, i said to everyone, you don't get to be 104 years old by doing the same thing every day. this is especially in the tech industry. you talk about technology a lot but this is an industry that is violently reinvents itself over and over and you have to keep changing with it. so i'm reinventing ibm like my predecessors as well. you say what are we now? we are a solutions company. when you mention technologies it's not just about the technologies. they are at the heart of the solution bus it is really what we do for clients that makes the most important difference here. we do some of the most mission critical important work in the world and really things that, you know, i say trains don't run, plains don't fly, they don't do it without us, but you have to do it in new ways, so we are an innovation company on
solutions that are underpinned by these current technology trends. >> rose: you've had declining revenue for a number of quarters. >> yes. >> rose: your goal, i assume is to find new revenues as you face the reality of declining revenues. from an outside view you'd say gee, revenues are declining, but a lot of it has been by design by us. >> rose: things you've shedded. >> absolutely. one of the things i learned with this great company is don't ever protect your past and that's how you succeed in the future. that doesn't mean at the minute. last year we divested $7 billion of businesses. i have to had they were also negative profit. if you move to higher value, that's not just in a share holders mind. you have to move out into some businesses and move into new
businesses. >> rose: because you have to transform on multiple layers and multiple platforms. >> i you adjust and you move on to the next era. when ibm was doing main systems, the pc came along and people said that's going to be the end. we went through a that and moved on to the next erravment now the internet. we again took the internet, made it real for the enterprise and now on the next set of trends. sheer one thing different. there are three of the technology trends at once. so for why the world feels a little different in the area, there is a reason. it's intense. you have the advent of the data which we'll talk about.
you have the adventive cloud which i put as buying things as a service and then you have mobility which i will come back to underscoring of security and the importance of it, which have the three things going on at once. they'll reorder our industry. but as i said all my colleagues, they will reorder yours, too, and we'll reorder every business whether a manufacturer, produce cars, retailer, it will make a change in how you operate. that makes a difference at this moment in time. add in currency, macroeconomics and other geopolitical things. >> rose: mobile systems, you made a deal with apple, you made a deal with twitter. how are you combining with these two huge names? >> yeah, this is a really interesting point that i think history will reflect on and show how important it was for us. i am a big believer in these partnerships. those names like apple -- and tim and i have talked -- they are wonderful at what they do for consumability, ease of use.
and that's a great thing. now, the market of the enterprise which we know so well, if you say what does that mean in the enterprise and we're really the gold standard for the enterprise, they're a gold standard for a consumer, so when you come together, as we've talked, it's good to know what you can do and what you shouldn't do as a business. so the idea is we could reimagine work in the enterprise if we worked together. so take their kind of simple consumability and then our ability to know industry's work flow, integration, and to me a perfect example to kind of bring it alive, my favorite one of the first apps we've done is flight attendants. i know you're going to run off to a flight. if you've ever been on a flight, in the air, you think i have a connection, you're on the ground, you get your phone, someone is helping you, typing away end leslie -- what about someone in the air walks up to you one screen no training as a flight attendant, shows you
pushes a button and you get the information on your flight. that's complex and we made it simple. so that is a perfect example of reimagining work because in the workplace with mobile devices, 70% of the time it's email and calendaring. they're likely not imagining how work is done. we put in industrial strength security add to that. >> rose: an idea steve jobs once expressed is you have to look at things with fresh eyes you can't see them as an extension of what you do. has that been one of the challenges for you at ibm? >> yes and no. i would say this is not the first set of trends. to reinvent yourself don't protect the past i was saying we've invented some of the trends but some we don't. you swim into them as hard as
you can and that's what the industry is like, you go as fast as you can into them. adjacencies are good, some are better. technology is taking us to places some better, what we are doing for healthcare we'll talk about. but back to your question on apple twitter, that is really about taking those ideas, consumability or massive data in the case of twitter, and we said you know what? we could improve every business decision if you could really understand the data. so we're taking the consumer technologies into the enterprise and i believe you will look back and we'll be the go-to platform for the enterprise that brought things into the business environment. >> rose: and you can access them through apple devices and all that. >> good for them. every partnership has a good win-win to it. that's right. >> rose: when you talk about those kinds of partnerships, is that part of the way you see apple's head-long rush into the future, finding both in a
venture capital standpoint, because you took all your seen your vice presidents out to silicon valley as soon as you took control, as i understand it, and introduced them to silicon valley saying we want to know what's going on out here. >> slightly different i would say. we have one to have the first research labs in silicon valley was ibm. just about anything regarding data sitting in silicon valley was begun by ibm. i think to provide whatever their clients need, it will be through partnerships and the like. so went out there for that reason to really form that foundation and obviously the team goes out there many times. but a lot of startups, who, by the way, part of what we do is help them. and this watson we'll speak a little bit about, one of the main things for watson is we built a platform and said this form of artificial intelligence, natural language, this thing
that learns companies come build your own business. you don't have all innovation locked up yourself. so 4,000 companies in line to build on watson. >> rose: you say one of our challenges is to prove that a large institution can be entrepreneurial. that a large institution can show the facileness of small startups. >> i agree speed is a really important thing. i believe now as we just have done our last results and shared with everyone we said, look these new businesses around data cloud, mobility they now represent 27% of ibm. and people go really? 27% of ibm and have grown it 16%. that is a big number and 27% which equals 28 billion is a big number. that's our job. continue that. i should say something interesting, it's not to say of the whole company the other
businesses are not good businesses, they're very good. we do the things that are kind of the heart beat of the world, but you innovate inside of them. you mentioned we do banks. one of our most recent announcements because we have all the systems in most the banks was how to do mobility and how to encrypt everything you do for security. so you reinvent that part as well. >> rose: an increasing issue. it is. i don't think there's a topic more important than security. every one of my clients i talk to i say whatever you're doing, you're not doing enough. you go through the things they should be doing around this topic. it is important for individuals businesses, obviously countries and the like. >> rose: let me talk about the cloud. were you late coming to the cloud? >> i look at cloud from a couple of dimensions. one dimension absolutely not late to the cloud. we were in private cloud years ago and for those watching, i've had many of my friends go what is the cloud? would you please quietly tell us what the cloud is?
just think of the cloud -- as i say, anything is a service. but you don't have your own electrical generation plant. you know a way to plug into something and you get electricity. you don't get to say what kind of electricity you want you know how to plug into it, that's what you get in a simple way. >> rose: spoken will by an electrical engineer. >> that's true. so in the cloud. what we did first, i always look through the eyes of a company in an enterprise business. we said the first thing people will do is do it on their own premises. they will say all my divisions i want you share and do things the same way. i give you a private cloud. in my four walls and own business, you're the only users, it's standard and you will all be that way. because it's less standard, it's usually less expensive. the next thing is the public cloud which that started in the consumer world. you say i have all my music on the cloud you probably don't know where the cloud is, right? well so we then started out and
said, you know what? people will do things like likely fast applications, the front end of a mobile banking app, they're going to put them out on the public clouds where it's not on your premise shared by many people. we started to build that and honestly it was moving too fast. we then acquired a company built by the bottom up for an enterprise which simple words what that means is it recognizes the importance of security, you must know where your data is -- i mean, we deal with healthcare banking, regulation. you can't not know where it's add. audittability. and most importantly people do things there just like the old days of the internet, you browsed, and somebody said i don't want to just browse, i want to buy something. then they had to connect into systems they already had that built things and priced them, logistics warehousing. so that's the world called hybrid, we connect the two together, but many other parts are software and services. >> rose: what's the division
between software and services. >> services 60% software -- >> rose: and that's been the big push at ibm prior to coming into services. >> we have acquired over the years in software we've acquired over 130 companies and put them together. people don't realize that. 130 companies. but in areas of solutions -- again, back to it's not just analytics, it's analytics that help banks do customer retention, that do fraud. it is healthcare where we've actually -- you know, i think of our history. we had -- if you go back in time we have participated in some of the most glorious moments of history whether it might have been the first systems that ever did census or landing a man on the moon, i'm telling you our moon chat will be the impact we have on healthcare. it's already started. we will do our part to change the face of healthcare. i am absolutely positive about it. that, to me, while we do many other things, that will be one of the most important. >> rose: is this called watson health? >> we just announce something called watson health.
can i back up one second? >> rose: sure. i want to tell everyone what watson is. the first generation of computers they counted things. the second generation you have to program them. everything you know today is programmed. what watson represents, we use cognitive, it's a system that learns. >> rose: you call it cognitive computing. >> it learns you don't program "cognitive" it's asystem that learns. >> rose: you call it cognitive programming. >> it learns artificial intelligence is a part of that. not all artificial intelligence does llike this. we started natural language, learning, including artificial intelligence, and we started with one of the toughest problems which was health care. we started withonicology. and i think this is some of the work you may have read about and seen where we have done work with memormal sloan kettering foronicology to do diagnoseis and treatment mayo clennic, clinical trial matching. cleveland clinic, how to teach
doctors. watson has been really through the rigor. and just picture as a party-- i always say take one cancer take breast cancer. two million new cases a year. you would guess, i think given all the progress of time in the world, mortality sup14%. incidents are up 20%. and the number of therapies for breast cancer approach 800 and hear. what would you tell uson can do, look at all your medical records. he has been fed and taught by the best doctors in the world, and comes up with what are the probable diagnosis, percent confidence, why rationale, diagnosis, why, odds, conflicts. i mean, that has just started to roll out in southeast asia to a million patients. >> rose: you have said in an interesting way in talking about big data, you said it will be the natural resource of the 21st century. tell me what you mean. >> this is-- because every company will say it's got so
much information no knowledge. you'll hear all sorts of things. this idea now though the amount of information created around us, whether it's pictures images, every day to to-- until you do something with the data, refine it like a natural resowrks it's no good. and you watch what happened with electricity, and then you saw steam, and then you saw fossil fuel. so for the 21st century it will be data. but just like other resources you know, the benefits go to people who refine it and do something with it. you know many countries that have natural resources that are poor countries, that don't do something with it. the same kind of analogy and i think it will end up being the phenomena of our time. and it won't be just your ability to look backwards. charlie, this will be about looking forward and that will make all the difference in the world about predictions. and that's watson sitting out here on a spectrum on far end of that and its ability to do
that. it'sip iconic to represent that future. this is about helping kids predict which kids are going to struggle in school and what they need to do. >> rose: here's what's interesting to me as well. it is not only the collection of the data and the assessment of the data. we now have better means to collect the data through sensors and everything else. >> that's right. >> rose: so that it's impacting on medicine in ways we never believe we would know. they have ways to measure your human body and its function more invasively and more precisely, than we've ever been before. therefore, with the collection of data that you have, you can take these numbers and these information packs and look at these compilation of a thousand other cases. >> that's right and compare and have evidence-based medicine. what you just described is a perfect example of the announcement we made this week which include ablle, johnson & johnson, med tronnic. what was behind -- >> this was a partnership. >> partnership, and it's an open platform. back to the idea of
partnerships ecosystems an open platform. but for every human, kind of a simple way to think of it, 10% of the information in your lifetime collected about you will be the formal medical records that you know of today. another 20% will be the genomics that's starting to happen. but what you just-- there is another 70% which people call it exogenous data-- your fitbit apple watch, what you're eating what you're filling in is there your heart rate. >> it will be 300 million books of data per person. that's kind of the amount. and with that you have a whole other world that can be health and wellness for the ability. >> rose: and the capacity to not be overwhelmed by it. >> and privacy, security all that all around it but not be overwhelmed. >> rose: either you said this or one of your colleagues:
>> well, that is one of my colleagues, but i actually agree. my head of research john kelly said that. and right now, we are already working on giving watson eyes, and one of the first things he's working on is melanoma and how to read melanomas that are actually cancerous and not. there are many false negatives, false positives in that whole area. but that is a very good example. now, usually that leads to the next question, "oh, does this replace everyone?" this is all about augmenting the decisions you and i make. it will be a very long time if ever, i believe, you will see that. i had that discussion with walter issacson. this is about augmenting, and we will be abe to augment so much of the decision making you and i have to make better decisions and do different things. >> rose: we will have the capacity to redirect how we spend our times.
>> absolutely. >> rose: how will it transform law and journalism? >> that's interesting you said that because we're working with a client right now in the area of law. think of watson in a couple of caiz ways-- an adviser and discoverer. in discovery you think of the same word, legal, discovery. the ability to find connections between all kinds of information is something watson does extremely well. which is why we're working with pharmaceutical companies to find and explore new compounds they hadn't thought about now alois, things that have a much higher odd of succeeding. think about that. if successful for that you cut the pipeline down for innovation, way down, way less expensive, and you get it out much faster. so this idea for legal is a wonderful area to say how could i do, even at a minimum, discovery of information faster. and so we're working with some clients right now to do that. >> rose: is there a timeline in terms of where you-- your open plans are in terms to be
fully engaged in where you want i.b.m. to be fully engaged? >> you know, not a time line and for a very good reason and let me tell you why. i feel we are engaged in the major areas that we need to have put down our roots in and placed our bets and moving along, and now it's about speed and scale of many of these areas. so you said big data we talked about a a lot. you can tell i hope from what i'm saying our hope is to transform industry. and when we talk about the cloud, it's to really make it enterprise strength and speedum what people can to. so we're-- we now-- i know these are already businesses. our data analytic is billions. we now scale them more industries, more people, more places. >> rose: you've been buying back your stock and paying dividends. what's the relationship behind that? >> you know -- >> other than driving up your stock price.
>> no, no. this has been for a very long time and our view this is not an either/or question. i know there's a lot of discussion about that. you go over the past decade we've invested $133 billion into our business, and we've returned to shareholders $118 billion through share repurchase and dividends. so clearly, a balance a balance tilted towards reininvesting in our business. as i look at my own capital allocation it's what do i need to reinvent to develop to do capital, to do acquisitions. and then am i still capable to do these other things and return to the shareholder. our shareholders look for that balance between those two and that we make those right decisions. and i feel very, very good about how we do that and how we make the decisions to do that. when we need it, we buy it. if we need twe go into it. but it's always to move to higher value. so not interested in revenue that doesn't produce value for clients or values for my
shareholders. we are not about profitless revenue. that's why when we'll look at us. it's a big company, and it's $21 billion of pretax profit. tathat tells you this is high value. >> rose: warren buffet is your biggest stockholder. and increased the investment up to 9%. what does he expect and what is your counsel from him? >> not just warren but all of our big shareholders that we have, they really do expect us to be stewards of their capital to keep moving this company to higher value and to be sure that we invest in the reet places for the long term. and it's really that simple-- return to them, stay high value for the long term and that's what i view my job is. my job is to allocate that capital and the right way to get that done and reinvent this company. that's why don't protect your past is what i say. never define yourself as a product because we're a solution. you get wed to some one thing
and that will be what you said earlier, a barrier. >> rose: you've tried to convince also or tried to speak to your researchers people on the cutting edge of finding technology and creating technology, that i.b.m. wants to be a company that's on the cutting edge of technology. >> i'm proud of the team. you know we've got the largest research organization commercial research organization in the world. so that is the i.b.m. company. and so the finest ph.d.s. seven nobel laureates to our credit. and really focused, though, not just on technology for its sake. the application, which is why you've watched us open up some of the new labs. we opened them in africa. we opened them in australia, and why africa? we are the first ones to put a commercial respect research lab on the continent of africa. very clear reason it's problems in society are so big you cannot bring the problem to the lab. you have to put the lab in the middle of that area. and so, the things that research lab-- true research not development. that research lab works on, it's
things like good enough government how to do massive health care. i mean, in a continent that in some countries you've got one caregiver to 10,000 or more people. and so we are working on really tough issues, and that's why we put the research lab right in the middle of it. >> rose: let me talk about you. northwestern. your father, your mother when you were very young had the responsibility of raising you and your three siblings yes? >> yes. >> rose: she's your hero. >> yes. >> rose: because she did what makes a hero. she realized that she had to take care of her family and she did all that was required in terms of jobs and education. tell me about her. >> oh, about my mom. oh, she's going to watch now. well i've-- i've not been shy about that. because, you know people always ask about heroes or people who are your, you know idols or who
you learned from and i'm a big believer of learning all the time. so you know, i'll learn something from our conversation today, from you wherever it is. i always keep thinking what did i learn, what did i learn? but the one that does stick out is my mom. and these are defining moments. and she did raise my brothers and my sister and myself. and she found herself one day with nothing. she department have a college degree. he didn't have a job. she had been raising us. her job was in the home. we never saw my mom blink, we never saw her cry. she did everything she had to do. >> rose: did you have to become a kind of parent to your siblings? >> well i had younger brothers and sisters upon i was the oldest by quite some distance to them. i certainly helped my mom. when she-- she would go to night school and i would baby sit and back and forth. but i always say what my mom taught us-- it was really by us watching, watching her and what she did. and she just-- that's it. she got an education.
she got a great job. she was determined we would succeed. and i say what i always learned from my mom is never let anything or someone define who are you. you have complete control. >> rose: you were making a commencement speech at northwestern. >> i will probably talk about that. >> rose: i will too that no one defines you in terms of your dreams other than yourself. >> and she is living proof of that. >> why rnlg of engineering and computer science for you? >> this is an interesting point. i always loved math. i mean, i would be the only one who would stay after school and go for extra help and extra things in calculus. i always loved math. and i always tell the graduates when i talk to the young kids and they say what degree should i go into? let me tell you why i always suggest engineer. not just because i believe about science in the future. i say it taught me to problem solve. this is the essence of engineering. you learn how to do that. you do that, you'll be prepared for wherever your passion takes you. because i've not always-- i went
into engineering at first put i didn't obviously stay there. but it doesn't matter complex, how difficult a problem is. you can find your way through it. and to me that is some of the basic skills of leadership and that's why i'm such a strong proponent of kids to go into engineering, and particularly women go to engineering that it doesn't dick dictate a stereotype type of job but it is a great foundation for marketing, sales, biology, anything you might want to do. >> in 1981 you went to work for i.b.m. >> i did, i did. i first worked for general motors for a short time and then i went to work for i.b.m. after that. it was a very sort of early point of kind of epiphany for me, and i said what i am passionate about is the application of technology not just one industry but it is the application of it. so i went somewhere where i could then take that and apply it to lots of different industries, versus find myself just in one. and that was what took me to
i.b.m. >> rose: here's something else you said or someone said about you, "she has the unique ability to make you comfortable in the change while still being uncomfortable." >> that's a great compliment. >> rose: it is. >> yeah, that's great. i mean i really believe-- but i actually learned that from watching lots of people. and this idea-- and it was actually ken shenault. he quoted someone-- it turned out to be napoleon-- the leader's job is to paint reality but give hope. and i think in there you will find that ability if you think about that all the time. because if you paint reality for people, they do understand where they start, and the hope is where they go. and then you give them the confidence to go there. and so i think that is another one of those traits. >> rose: one of the things i read about you is you-- you can tell me because silicon valley wasn't exactly the way i thought it was. you had them in and did a kind of assessment to create a sense of openness so that they knew
where they were and they knew what the possibilities were. they were aware of it, it was transparent for all of them. where did that come from? >> the driving idea behind it was when the facts are on the table, reasonable people will come up with very interesting ideas. when you let the barriers all down-- and we have great people-- they will come up with great ideas around it. so that is one of the ways, and it comes from a sense of-- you mentioned-- we're a big company. so when you're a big company you need to be clear about what you are and what you have to change and honest with yourself about that and if you are you can move it. >> rose: one of the responsibilities, it seems to me-- and this is why i think c.e.o.s ought to have real skills at communicating and you have been given praise for that skill. it is to be able to communicate where we have to go and whose responsibility and what the accountability is on the journey. >> yes, yes absolutely. >> rose: if you can do that,
people feel they're engaged, involved, and a part of getting there. >> yes. it's very much true. and in fact, we-- we probably have the world's largest massive online open course going on right now. we ended -- >> is this the think academy. >> think academy, yes. think is our history, the motto of our history. and so this is an idea. it's every month and i actually do the teaching-of-the-first hour of it. there are far better folks that do the rest of it. there is a belief as we move into these new areas and expand them, everybody, i don't care what your job is in the company, you have to understand it, and depending on what your job is you go into deeper levels about how you engage. this is online and interactive. this is the contemporary. we're getting to the point where it knows how charlie learns versus ginny, and if you learn more by video and you learn in certain ways it serves up that kind of way of learning. this is personalized learning of the future. >> rose: thank you good to see you.
suzy and jack welch are here. jack is the former chairman and c.e.o. of general electric. he led the company from 1981 to 2001, in 2010 he founded the jack welch management institute. his wife, suzy welch, is the former editor and chief of the "harvard business review." they have coauthored the book "life of the speed of-- "thereal-life m.b.a., your no-b.s. guide to wing the game, building a team, and growing your career." the stated purpose of this book is galvanize performance, unleash growth how to build wow teams and how to create a fulfilling career. and, and perhaps more important than all of them have fun doing it. tell me what's behind this. >> well, we were minding our own business. we wrote "winning" 10 years ago and since then built a life we really enjoy, traveling around the world, talking to
businesspeople in all different types of companies and different countries and jack was working in private equity, and i was doing my writing and we had no intention of writing another book. writing a book is hard, and we were happy can consulting and doing the kind of work we did. life was moving along though the thought came into our head as we were in this wonderful life, that there was no book that sort of was an m.b.a. in a book. >> rose: is the idea these are things business schools should teach you or may not, or is it-- >> no, the idea is more-- we're giving you in a capsule -- >> the best that you could get from business. >> best you could get from a business school. >> not everyone can go to a business school. >> business school is an expensive proposition. you take two years off your career. you go to a levy campus it costs you $300,000. you lose your sal reerk your promotions on the ladder. >> rose: i got the best of what they're going to do? >> i think this book is a good
supplement. it's not going to be the perfect answer to a top 10-- what we don't have here is we don't have consultants and investment bankers standing outside the door hiring these kids. our people are 38 years old. they're growing in their careers and they want to grow higher and make more. >> rose: you say "our people" what do you mean? >> our students. i'm sorry. our student. our students are 38 years old, they're midcareer and want to grow in their companies and want the tools to help them get there. we were growing 40% a year. >> rose: all online. >> 100%. when i lecture them, web access. >> rose: has want idea of online education gotten to the point where everybody agrees it's the thing that we all hoped would be? >> not yet but it's so much better. i mean, when we started talking about creating the jack welch management institute, there was still a little stoirchg it and it's gotten a lot better.
it used to be-- for instance online dating nobody admitted it and you look at the "times" wedding announcements and everybody admit they met online. and the technology has helped a lot with online education. >> rose: 10 lessons from the welchs here. your company's values and your personal values must be compatible. >> imagine if they're not. imagine if you value speed, fast-paced, cutting edge, entrepreneurial stuff. imagine if you value risk taking and you work at a big stodgy old bureaucracy that values hierarchy. i mean you've got to have compatibility. otherwise, you'll be like in a straitjacket. >> rose: when you were at g.e., the idea of the culture at g.e. was crucial to you. >> it was my whole thing. get faster become a-- get everybody's brain in the game. 60,000 people had stock options. they became owners. it was part of getting everybody -- >> the other thing that you did and you've said this, in performance cultures actions have to have consequences.
>> absolutely. if you get it right, if you do well. >> rose: you get a lot of praise. >> you get a lot of praise. and you get a lot of praise in the soul. >> rose: psychic income. >> psychic income and you get a lot of cash in the wallet. >> rose: you also say that you have to find coachable developments where you can coach somebody into developing. you can take a talent and make it better. on the other hand, there are people who have flaws who will not get better. >> you also have a culture, if you have a manager and they're developing people and promoting them, they've got to be rewarded for that. you've got-- every time you make a personnel appointment it's worth 100 speeches because you can talk all you want about values and this, and then you put a jackass in the job, and the organization says why am i going to listen to all that blowing. >> rose: versus putting the right person in the right job. >> that everybody knows and understands is a winner.
people lose sight of that. pontificating speeches about values and culture when it's really all about talent because the organization-- you are the last person generally to know in the organization what the scoop is. >> rose: were you that fellow? >> i tried not to be-- i try like hell not to be. >> rose: you were kind of a gossip, weren't you, in the best sense of that? you knew what was going on and people wanted to tell you. >> absolutely. >> rose: i want to talk about communication, too. the communication you say is simple, consistent, focused communication travels faster and is understood better by the organization. >> communication is so hard. it's so hard because people put spin on things, and actually the worst crime of communication is leaders, managers, even if you have a small team, you think if you say it once it's heard. it's just not true. you have to say it until you want to gag on it, and there are so many different ways people-- i was always amazed whenna i was running an organization and jack had this experience so many times. you say it and five different people hear it five different
ways. you have to to your message, the same message for everybody and say it again and again and again. and ipviet people to try out on you what they heard and push back. saying, "are you hearing me right?" and have that dialogue. >> rose: what's the generosity gene? >> it's character sthak you'll find in most great leaders. >> rose: generous with. >> praise, spirit. >> rose: time. >> coaching. cash-- they love to give raises. they love to give bonuses. they never steal an idea from one person and show it as their own. they always give credit. it's a spirit. and when you see people like that, and if you think back over your life charlie who you met and have done well and they were consistently doing well, they had that spirit. and you think about the skin flint who is holding back, who is taking ideas. they don't go that far. they just don't go. some of them sneak through the wicket. but in general, they don't.
>> rose: continuous learning is critical. >> especially today. especially today. >> gl it's about curiosity as well. >> but especially today because the world is changing very quickly. industries are forming and unforming. technology comes along, you know, periscope, this that the internet of things. if you don't keep up you just are a luddite in around two months. so you have to be learning. and keeping up. otherwise, you just lose-- well, first of all you just lose your head from the game. but you also lose your values your organization. >> rose: three section, the first time you talk about finance and marking. some people when they think about finance get scared, the idea of it's numbers and i don't really know how-- and it's some magic ideas. >> letter, letter. >> all the acronyms. >> all the acronyms. >> rose: exactly. you say you have to be familiar with finance. >> you have to be a-- to have a working knowledge of finance and we think there's one tool in this that gets you there and that's having an understanding
of variance analysis. >> rose: the second thing is about team work. i mean, you see that in sports teams clearly. but building a team that you respect. creating a place that the best want to come, and then molding them. tell me about that. >> you have to have a wow team. really hard to do. really important. look, sometimes a great team happens by kismet. it spontaneously occurs that there's a fantastic team. it's rare, though. you valley to work on having the right team and it's about having the right people. but today it's hard to get people on to a team because you've got other wonderful things pulling them away. sometimes the entrepreneurial world or the chance to be owners in a company pull away some of your best people. we want to give you thoughts about getting all these right people together and building the chemistry that will make the whole better than-- >> we also found out more than anything out there-- we talked to over one million people in front of them, around the world. and every audience gave us same
feedback-- where do you stand in your company? do you know where you stand? 10% of the crowd mack. >> rose: understand where they stand. >> where they stand. where their career's going and where they're going. it's frightening. and we have to break that. how can you build a great teem if people are come ago we have kids that go to work and they live and die on the... >> rose: when you were at g.e. you thought you would be at g.e. until you had the top job. early on-- >> well i quit once. i came close to quitting about three times. i was always evaluating the situation. >> rose: and why did you come close to quitting? what happened to make you think about quitting? >> well the first time i quit i was in my first year, and i got a raise. i went back to my bullpen of other engineers in a 400,000-person company, and i was pleased with my raise, nil found out they had the same one.
and i thought i was better. and that's socialistic behavior of spreading it equally. it killed me. and i resigned. and i had a job at another company, and my boss-- my boss' boss came up to my going away party, and said, "stay. here's what i'll do for you. you don't have to work--" do. >> rose: do you think most people go into their boss and say where i do stand? i want to know exactly where i stand. or do you think they're scared they'll be misunderstood? >> we have a way of doing this that works and we know it works. you're my boss, okay. "i'd like to talk to you how i can do better. tell me if you can. because i really want to shine here. and i know i might not be doing all you want." one of the great things an employee has to do is make their boss smarter. you have to prawden the boss' horizon.
the boss has to go out of his meeting or her meeting with you feeling they found something out, something new. and they're off to their races. it's critical. you don't go in ever like that. you come in like this. >> rose: another way to do that is say "how can i help you do your job better?" >> that's what i'm saying. in another way. >> rose: what else to do to-- i mean most people don't know how to go about that. one way is you're suggesting. and if in fact you feel like that you're not being paid enough. >> pay is not the thing you go in on. >> rose: you don't ever talking about that. >> i don't think so. you go in and you talk about the performance. and then you might work your way to pay. but you don't go in with, "harry got this percent. mary got this and i got this." that's not a-- but in all this, we want you to be authent itic, and we want you to have the
self-confidence to be willing to pick up stakes and move on if it's not the right place for you. >> rose: don't be afraid to do that. >> don't be afraid. >> rose: somewhere else may be better for you. >> most of the time it is. i can't tell you how many people have left g.e. on a performance basis. they weren't surprised. they left and went out and said "thank god this happened to me. i've got a whole new life. i'm happier. i like it more, et cetera." and i may have found a place that's a better receptacle of my skills. >> they also brought with them a knowledge of what happened there, and "i'm not doing that again." >> rose: you had a wonderful interview with my colleague gayle king about the magic of this relationship which i saw-- >> first. >> rose: early on. tell the story. can i tell you the story? you've heard this before. >> you were there at the ramp. >> rose: 2001, we were in florida, and he keeps going back to the back of the plane. i thought there must be something wrong with me.
so he finally realized he'd gone back for a phone call and he tells me that on monday there's going to be a piece in the "wall street journal" about you. and you. how have you built from that? what are the lessons? >> first, that was a great rock, because we went through a fire. we went through a firestorm. what a juicy story, the c.e.o. of g.e., and the editor of the "harvard business review." what a nice juicy story. >> we just gave it to them on a platter. >> we laid it out. >> rose: you knew you had to ride it out. >> it was going to make us or break us. when you're forged in fire like that, you know most relationships don't start in an explosion. ours did. and it only got easier since then, but it was quite a way to begin. >> rose: all right, hold on here, boys and girls.
>> i was asked about that today. bryan williams is a great guy. i've known him for many years. i was part of his growth and part of his-- part of my responsibility. >> rose: because you owned nbc at the time he was going from reporter to anchor. >> when tom brokaw was in seat, and bryan was in msnbc and tom-- we didn't know what tom's future was. bob and i talked for days about is the place for bryan in late night, some form of late night? because bryan, at every party guto where he's the m.c., he's really a wit. he's funny. he's clever. he's good. this is a tragedy. and i-- i just feel terrible about it. i really like the guy. i think the world of him. >> it's a second act for bryan williams. >> rose: there is? >> there will be.
>> there will be. he's got too much talent. >> rose: finally g.e. >> yup. >> rose: getting out of the financial sector. >> yeah. >> rose: you have said that you would have done the same thing today because of the new regulations affecting the financial sector that came out of dodd-frank. am i correct? >> that's correct. >> rose: before dodd-frank would you have disbanded? >> before '07? no. it was humming. we had 27 years of enormous growth, great people, great businesses. we had a-- jeff immel built it more than i did. >> rose: in 2013 it was 50% wasn't it. >> something like that. it was 14% last year it was 40%. this was a great-- and guess what? he picked just the right time to sell it because people need-- these -- >> stocks went up. >> and these assets in steve
schwartzman's hands, his team -- >> the real estate assets. >> and there are other great significances there that will go to other people. they'll get good prices, and they'll be able to buy back stocks, and create the same e.p.s. iful by buying back stock and having a concentrated investment business. but they'll be back doing other things and expanding in something else. g.e. is the only company still left in the dow jones. when i got the job from my predecessor, i inherited... international. i sold it in 24 months. that was the big 25% of g.e. in mining because we were doingans inflation hedge. the prime rate was 21%. >> rose: it looking at g.e. today, because it was when jeff inherited it it chosen by you the house jack built. >> yeah. >> rose: they're going back now for some of the reasons we said to its core business. >> they're going back to what
jack built. number one, engine business. the number one power systems business. the number one health care business. the number one railroad business. and the first acquisition we made in 2000 in the oil and gas business, which he's done a great great job of building out. so they're right back. my strategy was-- you've talked to me before about it-- number one and number two -- >> if you're not number one or number two in the business get the hell out. >> what are we going back to it? all those businesses that we made number one. >> rose: if you were coming out of business school today what do you think you'd like to do? >> you know, i would have loved to have worked in some kind of industry. like i this have sort of fantasy-- and i often talk to jack about it. would he have hired me out of business school? i think i would have liked to have sold jet engines. >> rose: are you serious? >> yeah, serious. i like to sell. and i like big industrial products. i like manufacturing. i think i would have-- you know, i was squared because i had been a journalist so i didn't think i
had the street cred to go into real business, and i went into consulting. that was a great run. i learned a ton at bane and got a couple of stripes on my shoulder for it. if i knew now -- >> rather than writing about it you wanted to do it. >> i would have loved to have done it. >> rose: you have been identified with the idea of quarterly performance. >> yes. >> rose: some people say there's too much emphasis on quarterly performances-- >> until you don't have it. >> rose: fair enough. >> if we were talking about quarterly earnings i wasn't there for the average tenure of a c.e.o., four and a half to five years. >> rose: you were there for 18. >> 20! >> rose: 20 okay. >> 20! that's 80 quarters. if you're squeezing the business you couldn't squeeze for 20 years and still grow the the company from that point on. g.e. grew. >> rose: what makes you angry about this and you are-- yes you are. >> none of that crap that comes out in the paper. get out of here. >> he's excited. >> not angry.
>> rose: in other words, there's nothing in your mind that is not good about this heavy focus on the part of wall street on quarterly performance? >> let me tell you what your job is as c.e.o. your job is to manage short and long. any jackass can come in and squeeze the place like crazy for two quarters. >> rose: but not for 20 years. >> not for 20 years. and any jerk can say, "hey, charlie, you asked me about the next quarter. i can't talking about that i'm dreaming. come back in five years and we'll chat about where i'm going." >> rose: on the other hand. >> yes. >> rose: on the other hand, there are people who say, "i've got to show focus--" and this is what you mean by simply squeezing for those quarterly profits. on the other hand, there are people who say if you don't worry about that and do more planning for the future, you will have and contribute more to the long-term growth of the company. >>, of course, you will. but you've got to do both.
>> at the same time. >> time! that's why you got the job. >> that's management! >> that's why they get these wild salaries. that's it. >> something that's very, very hard. >> charlie! >> rose: what's the toughest call you made at g.e.? >> oh, i think my-- i always say my biggest mistake was peabody, when i bought that it didn't work. >> rose: a lot of people had trouble buying investment companies. >> right. it's not the easiest game in the world for those. but we got out of that. >> rose: that was a mistake because? >> king too much hubris. >> rose: there. >> me. >> rose: on your part. >> at the time. >> rose: "oh i can run this too." is that what it was? >> yeah yeah. >> rose: you look more lovely than ever. >> rose: thank you, charlie. you chose well, young man. >> love you charlie. love you.
announcer: a kqed television production. man: it's like holy mother of comfort food. kastner: throw it down. it's noodle crack. patel: you have to be ready for the heart attack on a platter. crowell: okay, i'm the bacon guy. man: oh, i just did a jig every time i dipped into it. man #2: it just completely blew my mind. woman: it felt like i had a mouthful of raw vegetables and dry dough. sbrocco: oh, please. i want the dessert first! [ laughs ] i told him he had to wait.
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